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Tuesday, November 1, 2011

How To Make Online Stock Trading Worth Your While

To many, the internet is a godsend, and in some respects, it has made making money a lot more easier and this is down to the fact that many commodity markets and trade zones have plugged into the digital information highway. With this, more casual and part time investors were born, it basically carved out a market due to its ease of access and has increased the viability of many commodities that seemed to be only the arena of the experienced investor.

Online stock trading is a great way to start your portfolio and make some modest sums for a start, with financial independence in the long run of course. But you need to understand certain principles and aspects of the market before you decide to actually dive in and invest.

Stock trading online is a tricky business and it requires your utmost attention when you are buying and selling. This article will discuss some of the things you need to know to make your day at the market all the more fruitful.

One thing you must understand is that you need to have an intimate knowledge of the market and of course, the commodity that you are planning to invest in. Many investors make the same mistake of not getting to know what they are putting their money in. Find out exactly what you are getting yourself into, and with an adequate knowledge on the commodity and all its foibles, you will be able to draw up a strategy based on inside information and industry analysis.

Another thing you must have close to you is aspects of technical and fundamental analysis; important information that you need to have when you are thinking about investing. Using the tools of the market and external factors that may have a part in influencing the price of your commodity, the direction that I might be going to and how the market might evolve in the future.

The last thing that you must have is crucial money management, which is the downfall of many an investor. Knowing how much of a margin you can risk, having risk capital and assessing all expenditures during the course of your investments is very important. It will help you to plot out your investment journey, how much you are spending and how much you should be getting back.

It will also give you the power to micro manage your entire strategy, to assess it and even revamp it if the returns are not satisfactory. With these things in mind, you will be able to make online stock trading a much more viable enterprise that you can depend on fort either a primary or secondary income stream.

Risk is always a factor and the name of the game is to lessen the margin of risk by as much as possible and ensure your strategy is air tight. Of course there are many more things to learn and to understand before you can fully take on the stock market trading onlinet.

About The Author
John H. Anderson is a specialist in Forex Trading with more than a decade of experience. He owns Trade-currency.org where he provides his Forex Trading Review
http://www.trade-currency.org !

Thursday, October 20, 2011

Online Stock Trading - Who Else Wants to Finally Get Profits

Online stock trading, Blue-Chip style.

Investing in conservative blue chip stocks may not have the allure of a hot high-tech investment, but it can be highly rewarding nonetheless, as good quality stocks have outperformed other investment classes over the long term.

Historically, investing in stocks has generated a return, over time, of between 11 and 15 percent annually depending how aggressive you are. Stocks outperform other investments since they incur more risk. Stock investors are at the bottom of the corporate "food chain." First, companies have to pay their employees and suppliers.

Then they pay their bondholders. After this come the preferred shareholders. Companies have an obligation to pay all these stakeholders first, and if there is money leftover it is paid to the stockholders through dividends or retained earnings. Sometimes there is a lot of money left over for stockholders, and in other cases there isn't. Thus, investing in stocks is risky because investors never know exactly what they are going to receive for their investment.

What are the attractions of blue chip stocks?
1. Great long-term rates of return.

2. Unlike mutual funds, another relatively safe, long term investment category, there are no ongoing fees.

3. You become a owner of a company.

So much for the benefits - what about the risks? 1. Some investors can't tolerate both the risk associated with investing in the stock market and the risk associated with investing in one company. Not all blue chips are created equal.

2. If you don't have the time and skill to identify a good quality company at a fair price don't invest directly. Rather, you should consider a good mutual fund.

Selecting a blue chip company is only part of the battle - determining the appropriate price is the other. Theoretically, the value of a stock is the present value of all future cash flows discounted at the appropriate discount rate. However, like most theoretical answers, this doesn't fully explain reality.

In reality supply and demand for a stock sets the stock's daily price, and demand for a stock will increase or decrease depending of the outlook for a company. Thus, stock prices are driven by investor expectations for a company, the more favorable the expectations the better the stock price.

In short, the stock market is a voting machine and much of the time it is voting based on investors' fear or greed, not on their rational assessments of value. Stock prices can swing widely in the short-term but they eventually converge to their intrinsic value over the long-term.

Investors should look at good companies with great expectations that are not yet embedded in the price of a stock.

About The Author
http://www.OnlineTradingCoach.com Free Master Trader Presentations show you how to turn $10,000 into $100,000 through honest and simple trading methods you can use beginning today.

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